Five-year negotiations lead to modest energy bill

Like most heavily compromised legislation, the comprehensive energy bill agreed to this week by the House and Senate and headed for a presidential signature is as notable for what it doesn't do as for what it accomplishes.

It does not include oil drilling in the Arctic National Wildlife Refuge (ANWR). It declines to increase auto efficiency standards to conserve gasoline and decrease pollution. It won't bail out the makers of a controversial fuel additive targeted in more than 150 lawsuits. It doesn't make much of a dent in the greenhouse gas emissions causing global warming.

Nor - in the short term, at least - does it do anything to spare American consumers the financial pinch of soaring oil prices, or their dependence on foreign oil, now approaching 60 percent.

But the first major energy bill since 1992 does do enough to qualify as political progress, not least of all because it manages to avoid the twin threats of congressional filibuster or presidential veto. And coming as it does when war is being fought in an oil-rich part of the world, and when it nearly takes a second mortgage to fill up the family car, the package shows that Washington is doing something on energy.

The $11.5 billion, 10-year measure provides tax breaks for both energy production and conservation. It would nearly double ethanol production, which advocates say would improve air quality. It provides new subsidies and tax breaks for solar, wind, geothermal, and nuclear power, and it orders an inventory of offshore oil and gas resources. It requires new commercial appliances to be more energy efficient. It would strengthen the nation's energy grid in order to avoid the kind of blackouts seen in recent years, and it would extend daylight saving time by a month.

While compromises were made all round and enough Democrats joined Republicans to ensure passage in Congress, the end result has not brought the two sides in the energy debate much closer together.

John Engler, president of the National Association of Manufacturers (and the former Republican Governor of Michigan, an important industrial state), calls the measure "a key victory for manufacturers and the US economy."

"Passing an energy bill has been a top priority for us, because US manufacturers are faced with the highest energy cost in the world," says Mr. Engler.

Others see the bill, expected to be signed before the president's Aug. 1 deadline, quite differently.

"Both Republicans and Democrats are completely paralyzed in addressing the nation's three big energy challenges - reducing our dependence on Middle East oil, reducing gasoline prices for consumers, and beginning to shift our economy to renewable energy technologies," says Philip Clapp, president of the National Environment Trust. "On all three issues, the bill is a big fat zero."

Environmentalists also warn that it chips away at the Clean Water Act and the Safe Drinking Water Act by giving energy companies exemptions during construction.

Success in finally fashioning the bill after five years of trying came because two potential show-stoppers were avoided. One, lawmakers refused to shield the makers of the gasoline additive MTBE (methyl tertiary butyl ether), from lawsuits in the more than 30 states where the substance has polluted groundwater. And two, they ignored the administration's - and the oil industry's - push for new oil exploration in that part of Alaska known as "America's Serengeti" for all the wildlife it supports. In both cases, Democrats and some Republicans were prepared to hold up the bill had it gone the other way on those two issues.

Still, oil drilling in ANWR will continue to be a contentious issue: It's been attached to the 2006 budget resolution as a potential source of revenues. Overcoming a filibuster requires 60 votes, but the budget resolution requires only a 51-vote majority - which pro-drilling lawmakers are quite confident they have.

If there's one clear winner here it's corn farmers and the ethanol industry. The measure requires refiners to raise the amount of ethanol used in gasoline from 4 billion gallons to 7.5 billion gallons a year.

"Beyond the energy benefits, this renewable fuels standard will create thousands of jobs, revitalize numerous rural communities, and improve air quality," says Bob Dinneen, president of the Renewable Fuels Association, which represents the ethanol industry.

Others aren't so sure.

Taxpayers for Common Sense, a nonpartisan watchdog group, asserts that "the huge ethanol subsidies given out year after year have benefited few besides corn growers and ethanol producers, who are often just different units of the same large company."

In fact, the taxpayer organization figures that when all the spending and tax provisions of the comprehensive energy bill are added up the total cost is likely to exceed $80 billion.

Meanwhile, the fight over long-term energy involving broader security issues continues to be waged. In a letter to the president earlier this year, 26 former national security officials joined environmental advocates in calling for expanded use of "advanced biomass, alcohol and other available petroleum fuel alternatives."

In the end, hemmed in by constituents and special interests with different ideas, lawmakers chose to do something less.